On March 3, the Cabinet of Ministers of Ukraine approved a resolution to allocate UAH 16 billion to JSC Ukrzaliznytsia to launch a mechanism for state-ordered passenger rail transport in 2026, according to the Ministry of Development of Communities and Territories of Ukraine.
“The mechanism provides for compensation to Ukrzaliznytsia for the difference between the actual cost of passenger transportation and the income from ticket sales at current, socially accessible tariffs,” the Ministry of Development said in a Telegram post.
According to the information, funding will be provided on a quarterly basis through advance payments, and it is also planned to cover the costs of passenger transportation that were actually incurred in January-February 2026.
“The pilot project is an important step towards the introduction of the European PSO model in Ukraine – state procurement of socially important transport services – and the creation of a transparent and predictable system for financing passenger rail transport,” the Ministry of Development emphasized.
It recalled that the decision to launch this mechanism and the instruction to allocate funds for this from the reserve budget was approved by Cabinet Resolution No. 232 of February 18 this year. According to this document, advance payments to the carrier in the first quarter of this year will be made by March 6, and in the second, third, and fourth quarters – by March 25, June 25, and September 25, respectively.
For this year, the volume of state orders is set at 41.76 million train-kilometers in domestic traffic, with a planned cost of UAH 12.92 billion, while the planned revenue is projected at UAH 7.37 billion. In addition, planned investment costs of UAH 10.44 billion are included, which together forms a total of UAH 16 billion.
According to the results of Ukrzaliznytsia’s activities in 2024, the loss in the passenger transportation segment increased by UAH 2.4 billion, or 15.4%, to UAH 18.1 billion, which was covered by the profit from the freight transportation segment, which amounted to UAH 20.4 billion.
As reported by Serhiy Leshchenko, deputy chairman of the supervisory board of Ukrzaliznytsia, due to the loss of 49% of freight transportation in 2021-2025, the company can no longer subsidize unprofitable passenger transportation at their expense, proposes to increase freight tariffs by 41.5% in 2026 in two stages, and requests budget support.
In January-September 2025, Ukrzaliznytsia reduced its income from ordinary activities by 15.4% compared to the same period in 2024, to UAH 66.03 billion, and received a net loss of UAH 7.32 billion, compared to a net profit of UAH 1.66 billion in January-September 2024.
Revenue from passenger transportation increased by 11% to UAH 9.5 billion, but revenue from freight and postal transportation decreased by 19% to UAH 50.1 billion, and revenue from other services decreased by 14.7% to UAH 6.36 billion.
Investment expenses for the first three quarters of 2025 increased to UAH 11.51 billion from UAH 9.46 billion in the same period last year.
